Maldives Monetary Authority (MMA), the nation’s Central Bank, has reported USD 821 million in state reserves as of December 2024, with USD 63 million designated as usable reserves.

Official reserve assets, which represent a significant portion of these reserves, were recorded at USD 673.2 million at the end of December 2024. Additionally, the MMA includes reserves invested in domestic banks and securities outside the official reserve assets.

The total reserves include USD 148.6 million, with USD 146.3 million invested in local banks and USD 2.3 million in securities not classified as part of the official reserves. Other foreign exchange assets also contribute to this figure.

The State’s total reserves now stand at USD 821 million, though USD 758.6 million has been allocated as short-term financial incentives, or net drains, reducing the amount available as usable reserve to USD 63 million.

Rising public debt and a surge in foreign currency transactions have placed strain on the Maldives’ financial standing, contributing to a decline in the country’s credit rating.

In a move to stabilise reserves, the MMA secured USD 400 million through a currency swap agreement with the Reserve Bank of India. This agreement has significantly bolstered the reserve situation, with funds invested in local banks being settled through the swap arrangement.

The central bank is also set to implement a policy from January 28 onwards, whereby 60 per cent of income from foreign-funded businesses will be directed to banks. This measure is expected to enhance reserve stability over time.